This section is intended to provide a background or context to the invention recited in the claims. The description herein may include concepts that could be pursued or may have been pursued, but are not necessarily ones that have been previously conceived or pursued. Therefore, unless otherwise indicated herein, what is described in this section is not prior art to the description and claims in this application and is not admitted to be prior art by inclusion in this section.
Generally speaking, healthcare providers send bills to payers as medical claims. These medical claims can be sent on paper via CMS 1500 form (professional) or UB-92 form (intuitional). Medical claims can also be sent electronically in the HIPAA 837 format (837p or 837i). In certain circumstances, a patient can have insurance from multiple payers (for example, a wife insures a husband and employer insures the husband, too). When a patient has two or more insurance companies, one insurance payer is considered the “primary payer” and that payer is billed first by the provider. Other payers are considered secondary, tertiary etc. and are billed sequentially. The process of billing multiple payers for one patient is also called COB or coordination of benefits. The majority of claims received by a payer are primary claims, only a small percentage of medical claims are secondary or greater to the previous claim.
Not all payers can accept and process COB claims electronically. The majority of providers do not send 837 COB claims Further, the majority of providers send a paper EOB (explanation of benefits) from the previous payer with a paper CMS 1500 or UB-92 form to the COB payer via the regular mail. The paper EOB from the previous payer is required to facilitate the adjudication of the claim by the COB payer. The paper EOB shows the COB payer what adjustments were made to the previous claim and how each service line was paid and adjusted. It also shows the total amount paid and what the patient responsibility was for the claim. Accordingly, providers are faced with using a costly paper-based procedure to process COB claims. As such, there is a need for a system and method which allows providers to electronically process COB claims to payers, even in the situations where providers do not have electronic data for the patient or a compatible medical billing software product.